Building consents rise in March, snapping declines

New Zealand building consents rose in March, snapping three months of declines, with increased intentions to build townhouses, units and retirement villages.

Seasonally adjusted dwelling consents climbed 11 percent to 2,175 in March from a month earlier, the biggest monthly gain since April 2013, and turning from a 6.5 percent fall in February, according to Statistics New Zealand. Of that, permits for new houses gained 7.1 percent to 1,515 in March, its second monthly gain, and the biggest increase since December 2013.

On an adjusted basis, new building permits rose 14 percent to 2,271 in March from the same month a year earlier, though new house permits were more muted with a 0.5 percent gain to 1,640. On an annual basis, all dwelling consents were up 12 percent to 25,038, with new house permits rising 3 percent to 18,012.

"Townhouses, units, and retirement villages have driven the increase in new dwelling consents over the past year," business indicators manager Neil Kelly said in a statement.

New Zealand's Reserve Bank is becoming increasingly uncomfortable with the strength of the property market as several years of under-investment leaves a supply shortage in Auckland, while the Canterbury earthquakes shrank the stock in Christchurch. Last month deputy governor Grant Spencer noted that annual house price inflation in Auckland reached almost 17 percent last month and in the face of record migration the city had a shortfall of between 15,000 and 20,000 properties to meet population growth.

Today's data shows consents rose in 10 of the country's 16 regions, with Auckland showing the biggest gain, up 195 to 756 permits from the same month a year earlier, followed by Wellington, where permits increased 96 to 204. Otago reported the biggest decline in consents, down 24 to 94 in March from the same month a year earlier.

The value of non-residential building permits increased 0.7 percent to $427 million in March from the same month a year earlier, for an annual gain of 20 percent to $5.27 billion.

(BusinessDesk)